6% mortgage rates

[spring33]

Old thread https://www.mumsnet.com/talk/property/4813815-5-mortgage-rates?page=1

New thread, let's hope the next one won't be 7% interest rates or higher.

@Lightscribe -no good scenarios at present!
Personally, I think there is no chance of a 'soft landing' and that we could have the worst of both worlds with stagflation. Eventually, The Fed will panic and revert to QE, etc and the consequences will be lots more inflation.

I never said the housing market will rise again “in short order”. I do think the market will start to pick up once Buyers feel confident that interest rates are past the peak but sentiment won’t change overnight and obviously, many will still be limited by affordability.

Anyway, this thread is about interest rates not the housing market as a PP rightly pointed out recently.

No, if you look at what is going on in the U.S bond markets today, historic moves and "experts" laughable wrong again on the jobs numbers, rates are only going one way in my opinion and BOE is just going to follow the FED as they always do and globally rates are on the up, no reason to see drops at the moment IMO but if something "breaks" as they like to say, and it was a big break, they might have to cut rates, unlikely before December but you never know! IMO though as an ordinary investor/mortgage holder you shouldnt really be gambling on that, just fix and pay off debt is the way to go for ordinary people now, and personally I wouldnt be borrowing just now but the rate you have seems decent for the climate we are in, the U.S bond yields are on a moonshot today breaking the 5% levels all over the place, actually quite scary how quickly it can happen.

The U.S jobs report today shows you how much we should rely on "forecasts", not even laughable any more TBH how wrong they got it. As I have said previously, "forecasters" and analysists work for the big banks, they don`t work for ordinary people, but in the end the bond market will call the shots not "experts", stay out of mortgage debt, get out of mortgage debt is my call.

@CrashyTime thanks for that. Yep, the intention is to borrow it to get everything done now as think building costs will continue to rise and we’ve already got builders on site so makes sense.

Plan is to pay down the extra 10% per year allowed to hopefully almost get rid of it within the 5 years (whatever we can save over the 10% we will put in savings and pay down as a lump sum at end).

But it is scary times - not sure what our 1.29% will jump to in mid 2027. Only saving grace is that nursery fees are gone from Sept 2025 so we do have wriggle room. But I do worry!

So far they havent panicked, and they are rock solid on the 2% target staying as their ultimate target, there will be a lot of pain for debtors en route to that target, do you think they dont have the stomach for it?

Sounds like a decent plan, 2027 is a bit away and that gives you time to prepare, Good Luck!

Yes. I think they definitely won't have the stomach for it when everything else starts really crashing. I think things will fall a fair way first before they panic and I also think their 'solution' (QE) will just create even more problems.

Scary thought, more QE would be an absolute disaster IMO.

I agree with you. It was a policy of desperation and went on far too long. I think they will reach for the same when they get desperate again. I do think lots of things will 'fail' first though.

Not sure it will have the same impact as it did in 2008 though? Would they try QE and keep rates high at the same time, a bit like the Truss budget fallout and the U.S banking run? Would the public be as confident as they once were to start borrowing again knowing that they could get pummeled with higher rates at any moment?

Yes. 100%. People have incredibly short memories.

Most don't think they will rise much now, but they don't look likely to fall either.

https://www.bbc.co.uk/news/business-67056069

Was just about to post that! Are the IMF considered "experts"?

https://www.bbc.co.uk/programmes/m001rbqb

We haven’t begun the secondary wave of inflation yet. Watch the oil price over winter for direction. (Wars tend to send this up)

If oil spikes again, that will then shake out to the consumer end later down the pipe in 2024 and compounds on top of elevated factors already in place.

BOE is just going to follow the FED as they always do and globally rates are on the up, no reason to see drops at the moment IMO but if something "breaks" as they like to say, and it was a big break, they might have to cut rates, unlikely before December but you never know!

Massively agree about BoE following US, it's the trend for them. Unfortunately, UK is mainly service-led country, not much else apart from that. Puts us at the mercy of economical shocks.

We also used to have a housing bubble as a mainstay of the economy, people are getting wise to that one now though, do we need to start making things again?

ideally make semi-conductors haha. but I'm a bit of a pessimist with our mainly rubbish education system. don't think we have enough talent here for that. i mean, look at the government we've had for the past 13 years... and they came from the "best" schools.

Yes, frightening what the "best" education has produced isn`t it? BTW can you actually still get a mortgage for 6%, or should the thread title be updated?

Depending on you LTV%, some 5yr fixes under 5%.

Of course you can. You just need to pay Skipton BS 5% of the outstanding mortgage as a fee. Charlatans one and all. They deserve to go under.

https://www.thisismoney.co.uk/money/mortgageshome/article-12610559/Skipton-BS-launches-two-year-fixed-mortgage-rates-low-3-35-theres-BIG-catch.html

Agree with you @XVGN the Skiptons "offer" is bullshit due to the high fees. However, some people may be interested in Nationwide new deals under 5%

A three-year fixed rate mortgage for home movers, charging 4.99%. This deal is 0.45 percentage points below what Nationwide previously offered. Available to those with a 40% deposit.

First-time buyers that are able to purchase with at least a 40% deposit will also be able to secure a rate of 4.84 per cent with Nationwide, if fixing for five years. Nationwide's best two-year fix for first-time buyers will be 5.74% from tomorrow.

There are lower two-year fixes available across the wider market. For example, Halifax has a 5.32 % deal and HSBC has a 5.34 % deal.

https://www.thisismoney.co.uk/money/mortgageshome/article-12615235/Nationwide-cuts-mortgage-rates-offering-two-best-buy-deals-5.html

I can't find those rates with HSBC or Halifax for a 2 year fix. Best I can find is about 5.5% without a product fee.

Do people check what they're actually paying in total by the end of the mortgage term at these high interest rates? Just wondering. Because, as an example, the way I see it... a house at £500k with 20% deposit, 5.5% interest rate over 30 years is a pretty crazy total and makes me want to scream!!

Same with other loans gulp. Businesses must be suffering (obvs they do it differently to a mortgage, but still!)